SEBI strict towards KYC, P-notes regime

The Dollar Business Bureau

Taking the proposals kept before the board in meetings, the Securities and Exchange Board of India issued stern KYC and disclosure rules for participatory notes.

Offshore Derivatives Instruments issuers will now have to identify and verify the Beneficial Owners in subscriber entities holding threshold more than permissible limits, which is 25% in case of companies and 15% in partnership firms.

The issuers have also been asked to verify the people who control the operations, when BO are not in accordance with the above mentioned criteria of threshold, said SEBI.

The market regulator, considering the transfers of ODIs, stated that the intermediate transfers during the month will now have to be reported.

Earlier, the details of ODI holders had to be reported compulsorily to SEBI on monthly basis.

The holders of ODI also need to look out for details and maintain a record of all the transfers issued by them. The details will have to be made available to the regulator as and when demanded.

Additionally, ODI issuers will be responsible to reconfirm the ODI positions semi-annually. In case of any difference in the data reported, immediate information should be sent to SEBI.

ODI issuers will have to keep necessary systems in place, conduct periodical review and examine its controls, processes and systems. A certificate in that regard shall be submitted to SEBI on annual basis. The certificate shall be assented by CEO or an equivalent of ODI issuer.

SEBI stated that the certificate will be required to be filed within a month from closing of the calendar.